Graduating from college is an exciting time. You likely have your first “real” job, may have purchased your first car, and finally feel like you have entered the real world.

Of course, all of these exciting new things are scary; they are huge responsibilities that can be difficult to manage. And just when you are getting the knack of juggling all of your bills, your first student loan statement arrives.

Student loan debt can be a huge burden for many new college graduates. The average graduate from the class of 2016 has over $37,000 in student loan debt, which represents a six percent increase from 2015. So how can you take change of your debt to pay it down quickly?

Making student loan debt a priority is critical if you want to build a solid financial future. Once your student loans are paid off, you will have more money to devote to your other financial goals, such as saving for a house or putting more money into retirement. You need to take control, stop complaining, and come up with a plan.

Here are some tips to start chipping away at your student loan debt:

1. Refinance Your High Interest Loans

If you have private student loans, there is a good chance that the interest rate on those loans is less than favorable. It may be a variable interest rate, as opposed to a fixed rate, which means that it can change with the market, or it could be higher than the interest rates on your federal student loans.

Interest rates on private student loans are determined based on the creditworthiness of the borrower. As a result, many college students with private student loans find that their interest rates are higher than the rates on their federal loans.

Start by finding out what the interest rates on your private student loans are and if they are fixed or variable. If the interest rates are high, consider refinancing these loans.

Refinancing is a process where you can apply for a new private loan to consolidate multiple private loans. If approved, you will receive a new interest rate on this loan, which is typically a lower.

To be eligible for a refinanced student loan, you generally have to have a credit score of at least 660, a good income, and a history of making on-time student loan payments. Refinanced student loans often have shorter loan periods, which means that you will ultimately end up paying less interest on your loans.

2. Make Bi-Monthly Payments

One of the best ways to pay off your student loans faster is to make extra payments, but for anyone who is pinching pennies, the idea of making extra payments might seem impossible. But one way to do this is through making bi-monthly payments. This trick can help you pay off your student loans faster — and you may not even notice the difference.

The way it works is simple:

If you owe a certain amount per month, say $1,000, split it into two equal payments ($500/each) and make those payments every other week (making sure that both payments are made before the due date at the end of the month). Because you are paying every other week, you will end up making an extra payment each year (26 weeks x $500 = $13,000 versus $12,000 if you paid once a month).

Doing this can help you pay off your loan much more quickly and save you hundreds or thousands of dollars in interest payments.

3. Always Pay More Than the Minimum

If you don’t like the idea of bi-weekly payments or can’t swing an entire extra payment each year, then try something slightly different: just pay more than the minimum each month.

Adding extra money to your student loan payment, whether it is $25, $50, or $100, can really help to make a dent in the total amount that you owe. That is because of how payments are applied to student loans, with payments first going to outstanding fees, then to accrued interest and finally to principal.

When you pay extra on your loan — even if it just a little bit extra — it will pay down your principal. The next month, you will have slightly less interest to pay — which means that a little more of your principal will be paid off, and so on until you have paid off your loan entirely.

Ask Family for Gifts

Paying down debt can be really hard, so why not ask for help? If your family is in a position to do so, asking them for gifts of money for birthdays and holidays to help pay off your student loans is a great idea.

As noted above, it doesn’t have to be large amounts — even $50 can make a difference in your loans — but it will certainly be a boost towards your overall goal of getting out of debt entirely.


By Jacob Evans

Jacob is the voice behind Dollar Diligence, a personal finance blog focused on debt repayment and savings strategies. Find him on Twitter for new articles and tips.